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Philippines: DOF, BSP move to ease bank secrecy law
MANILA, Philippines — The Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP) are urging lawmakers to ease the bank secrecy law to effectively implement the proposed amnesty program for taxpayers with unpaid obligations.
According to Finance Secretary Carlos Dominguez, the BSP is one with the DOF in its position that a general tax amnesty program cannot be implemented without lifting the bank secrecy restrictions in fraud cases.
He said BSP Governor Benjamin Diokno told him that the central bank wants to get involved in efforts to convince the Congress and make sure these two provisions go hand-in-hand together.
In this regard, the finance chief directed Finance Undersecretary Gil Beltran to inform the Congress of the DOF and BSP’s position on the issue.
“Make sure that the general amnesty and the lifting of the bank secrecy – it has to be together,” Dominguez told Beltran during a recent DOF Executive Committee meeting.
The proposed general tax amnesty program is part of Package 1B of the Duterte administration’s Comprehensive Tax Reform Program (CTRP).
In February, President Duterte signed into law Republic Act 11213 or the Tax Amnesty Act, but vetoed the law’s sections on the general tax amnesty program due to the lack of provisions on bank secrecy and automatic exchange of information.
This left only the estate tax amnesty and tax amnesty on delinquencies under the law.
Duterte vetoed the items as implementing a general tax amnesty law without lifting the bank secrecy would only lead to revenue losses for the government and encourage tax evasion.
In his veto message, President Duterte said “our experience with the 2006 tax amnesty under RA 9480 has shown that without safeguards and measures against tax evasion, the objectives of an amnesty such as raising revenues and expanding the tax base cannot be fully achieved.”
Dominguez said that had the President not vetoed the general tax amnesty provision, the government would have only raised P6.8 billion from the law’s implementation in 2019.
This is lower than the estimated revenue of P13.6 billion if the bank secrecy and automatic exchange of information had been included.
Source: https://www.philstar.com/business/2019/10/10/1958888/dof-bsp-move-ease-bank-secrecy-law#EHYV17hrHbsyPTWQ.99